Ted Leonsis is looking to succeed where Jack Kent Cooke failed.
Mr. Leonsis is set to join officials from Virginia, including Gov. Glenn Youngkin, at a 9 a.m. event Wednesday to unveil a $2 billion arena project for the NHL’s Capitals and the NBA’s Wizards in Alexandria.
Multiple sources with knowledge of the project confirmed the details — a 20,000-seat arena to house the teams, with direct access to the new Potomac Yard metro station.
The state is expected to kick in $200 million in infrastructure improvements in the area on top of financing the arena project through the issuance of municipal bonds. Mr. Leonsis’ company, Monumental Sports & Entertainment, would lease the facilities from the state for at least 30 years.
Instead of an up-front incentive payment, one person familiar with the agreement said Virginia and Monumental will instead share future revenue from the development expected to be created around the arena, a “mini-city” concept that has become popular ever since the Atlanta Braves moved to suburban Cobb County, Georgia, and created a year-round destination anchored by their new stadium, Truist Park.
The agreement will be contingent on approval this spring by Virginia’s General Assembly. The state House and Senate are currently controlled by Democrats, while Youngkin is a Republican, but Wednesday’s event is expected to include a bipartisan show of support.
The objections are expected to come from the nearby neighborhood of Del Ray, which worked to torpedo stadium plans by Cooke — the late NFL owner who wanted to move his team, known then as the Redskins, to the site in the early 1990s.
Leonsis can move the teams out of D.C.’s Capital One Arena as soon as the 2027 season. A source with knowledge of the situation said D.C. Mayor Muriel Bowser made a last-minute pitch to keep the teams in the District that was ultimately rebuffed.
Ms. Bowser has previously spoken of the importance of the arena as the District works to revitalize a downtown that has languished ever since the pandemic.
She has also been emphatic that she will be aggressive in pursuing the Washington Commanders’ stadium project. The football team is also able to exit its lease in 2027, and is under new ownership that wants to build a new facility.
Monumental had previously asked the mayor for $600 million to refurbish Capital One Arena as part of a long-term agreement to stay.
While Virginia’s contribution can’t be immediately quantified, it is expected to be competitive with that ask.
Virginia lawmakers were uncomfortable with a direct cash payment of that amount, having watched a potential $1 billion Commanders subsidy go up in flames during last year’s session, and will instead create incentives through sharing what is expected to be a surge in tax revenue as a result of the teams relocating.
Both teams play 41 regular-season games a year, creating nearly year-round opportunities for food, beverage and entertainment outlets at the site.
While the future of Capital One Arena is up in the air, it may remain in use as a concert and event venue as well as Georgetown basketball.
Monumental’s other team, the WNBA’s Mystics, plays at a dedicated arena elsewhere in the District.
The Potomac Yard site will be near a new Virginia Tech Innovation Campus, as well as Amazon’s East Coast headquarters.
During the Redskins stadium negotiations, team officials touted that it was quicker to get to Potomac Yard from the White House than it was to reach RFK Stadium by car. The easy access by Metro is likely to further assuage concerns about traffic overrunning the area.
Mr. Leonsis has hinted in the past about turning Monumental into a publicly traded company, which could raise some of the money needed for a major “mini-city” development. He also became the first NBA owner to accept investment from a foreign fund, selling a share of the company to a Qatari investment vehicle earlier this year.
Using the state’s access to municipal bonds would allow construction to begin at a lower interest rate than Mr. Leonsis could currently get on the open market.
Still, until there is General Assembly approval, the door remains cracked open for Ms. Bowser and the District to attempt a “Hail Mary” that would keep the teams in the city. But with Commanders negotiations looming, it’s unclear how far the District will be able to go financially.